Beam Communications : Activities Report and Appendix 4C

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25 July 2022

The Manager

Market Announcements Platform

Australian Securities Exchange Limited

ACTIVITIES REPORT AND APPENDIX 4C: QUARTERLY SALES RECEIPTS HIT RECORD HIGH

AS ZOLEO ANZ SUBSCRIPTIONS ACCELERATE

Highlights:

• Strong finish to the June quarter (4QFY22) with customer receipts hitting a record $8.7m, or +79% vs. the previous corresponding period (pcp)
• Beam recorded a positive operating cash flow of >$0.5m despite delivery delays and a sizable prepayment of components to secure prices
• Continued growth across Beam's businesses with SatPhone Shop sales doubling and Beam equipment (ex ZOLEO) sales up 58% quarter-on-quarter (QoQ)
• ZOLEO ANZ sub growth accelerating by 46% QoQ in June quarter to 3,700+ (vs. 26% in 3QFY22)
• Robust balance sheet with total available funds (cash plus unused and available debt) of $7.2m
• Positive earnings outlook with momentum in 4QFY22 extending into FY23

Beam Communications Holdings Ltd (ASX: BCC, "Beam" or the "Company") is pleased to provide its quarterly update and commentary on its Appendix 4C for the three months to 30 June 2022.

Summary of cash position

Beam recorded a 79% jump in quarterly customer receipts vs. the previous corresponding period (pcp) to a record $8.7 million and posted a positive operating cash flow of $508,900 despite having to prepay for components to secure prices and supply in this volatile environment.

Growth in Quarterly Customer Receipts

$k 10000

8000

6000

4000

2000

0

Sep Qtr

Dec Qtr

Mar Qtr

Jun Qtr

FY20 FY21 FY22

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The Company has a robust cash position with total available funds of $7.2 million, which is made up of $5.8 million in cash and $1.4 million in available but undrawn debt.

The cash position of $5.8 million at the end of the period (vs. $6.2 million in the previous quarter) is primarily due to the capitalisation of development costs for the new Iridium Certus® device (which is backed by a binding US$12 million order from Iridium) and ZOLEO.

Operating activities

The increase in customer receipts was driven by ongoing global demand for Beam's innovative devices. This demand is demonstrated through Beam's wholly owned SatPhone Shop business, which is Telstra's largest satellite dealer, where sales more than doubled (+111%) in the June quarter compared to the March quarter.

Additionally, ZOLEO's net subscriber growth in Australia and New Zealand accelerated strongly in the latest quarter to 3,739, or 46% ahead quarter-on-quarter (QoQ) and 191% above the pcp.

Further, the number of ZOLEO devices shipped and invoiced by Beam to the joint venture during the June quarter increased by 50% QoQ to 16,072 units. This takes the total number of devices Beam had delivered to the JV since ZOLEO's launch in early 2021 to over 91,000 units.

Growth in ANZ Subs Accelerating			Number of ZOLEO units shipped and
													invoiced to JV
4QFY22										No. #
									60,000
3QFY22										50,000
2QFY22										40,000
									30,000
1QFY22										20,000
									10,000
4Q FY21										0
									FY22			FY21		FY20
0	1000	2000	3000	4000				Q1		Q2			Q3		Q4

Demand for ZOLEO continues to grow at a time when supply is struggling to keep up with demand. Supply is constrained by the ongoing disruptions to global supply chains that is afflicting the whole industry.

This means Beam may not be able to deliver all shipments of ZOLEO to the original timeframe in FY23, although the potential delays will only have a minimal impact on Beam's financial performance as the bottleneck will not have a material impact on Beam's territories, and Beam is expecting this situation to improve over the course of the next 12-months.

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Nonetheless, the outlook for ZOLEO has never been brighter, particularly following the launch of the multi-award-winning solution into the UK and European markets in May and the continued growth in Australia as represented in the latest subscriber numbers.

Sales of Beam's other equipment have also grown strongly in the latest quarter. Excluding ZOLEO, sales of these devices, including Iridium GO! and satellite terminals and docks, increased by 58% in the June quarter compared to the previous quarter.

The largest outflow of cash from operating activities are product manufacturing and operating costs of $6.2 million, which largely relate to the prepayment of components to buffer against supply chain disruptions, and staff costs of $1.3 million.

Investing and financing activities

During the June quarter, Beam capitalised $926,000 in product development costs relating to the new Iridium Certus® devices and ZOLEO product enhancements.

There was no cash movement for financing activities during the period and the Company did not receive any research and development grants from the federal government during the quarter.

Yours faithfully,

Michael Capocchi

Managing Director

For media and investor enquiries please contact:

Brendon Lau

1. [e-mail]

1. 0409 341 613

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About Beam Communications Limited

Beam Communications Holdings Limited is an Australian publicly-listed company (ASX:BCC) that specialises in the design, development, manufacture and distribution of satellite, cellular and dual-mode equipment applications and services. Beam has developed several world-first innovations and its products and services are adopted by some of the world's largest satellite and telecommunications companies, such as Iridium, Telstra, KDDI, Inmarsat and Thuraya. Beam also developed the multi-award winning ZOLEO device, which generates recurring subscription revenues for the Group. Beam Communications Holdings Limited owns 100% of Beam Communications Pty Ltd and SatPhone Shop Pty Ltd www.satphoneshop.com. For more information, visit www.beamcommunications.com.

About ZOLEO Inc.

Formed in 2018 and headquartered in Toronto, Canada, ZOLEO Inc. is a joint venture between Beam Communication Pty. Ltd. and Roadpost Inc. that is pioneering the development of innovative lower cost, consumer-oriented global messaging solutions, including innovative wireless devices and apps based on Iridium short burst data (SBD), cellular and Wi-Fi standards. The company serves three primary markets including consumers residing on the fringe of cellular coverage, outdoor recreation and lone worker safety. Its products are offered through authorised retailers in the US, Canada and Australia. Roadpost is responsible for retail distribution in North America and Beam is responsible for the Asia Pacific region. Staged distribution in other regions will be jointly managed. For more information visit www.zoleo.com.

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Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

Beam Communications Holdings Limited
ABN	Quarter ended ("current quarter")
39 010 568 804	30 June 2022

Consolidated statement of cash flows	Current quarter	Year to date
			$A'000	(12 months)
				$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers	8,647	28,176
1.2	Payments for
	(a)	research and development
	(b) product manufacturing and operating	(6,215)	(20,728)
		costs
	(c)	advertising and marketing	(103)	(507)
	(d)	leased assets	(58)	(240)
	(e)	staff costs	(1,275)	(5,451)
	(f) administration and corporate costs	(363)	(988)
1.3	Dividends received (see note 3)
1.4	Interest received	-	1
1.5	Interest and other costs of finance paid	(20)	(68)
1.6	Income taxes paid/refunded		104
1.7	Government grants and tax incentives
1.8	Other (provide details if material - GST and	(104)	(228)
	FBT
1.9	Net cash from / (used in) operating	509	71
	activities
2.	Cash flows from investing activities
2.1	Payments to acquire or for:
	(a)	entities
	(b)	businesses
	(c) property, plant and equipment	(20)	(54)
	(d)	investments
	(e)	intellectual property

ASX Listing Rules Appendix 4C (17/07/20)	Page 1
+ See chapter 19 of the ASX Listing Rules for defined terms.